5 tips for SMEs to thrive in the ‘New Normal’

5 tips for SMEs to thrive in the ‘New Normal’

158
0
SHARE
  • In the face of physical store closures, e-commerce has emerged as the way forward for businesses
  • Data insights can help SMEs make decisions that would enable their businesses to grow
  • Web-based analytics can identify where visitors of a website are located, indicating potential demand for Philippine-made products
  • SMEs need to arm themselves with tools that enable greater automation, visibility, and flexibility to spend less time and labor on manual processing

Beyond the immediate health impacts, the coronavirus pandemic and the quarantine measures have also had severe economic impacts, badly hurting businesses in the Philippines, particularly the small and medium enterprises (SMEs).

Faced with serious challenges such as supply chain disruption and potential physical store closures, many SMEs have been forced to suspend operations or dip into personal savings to advance salaries amid limited liquidity and delayed payments due to the dramatic slowdown in economic activity.

UPS Philippines in a recent release said it found out from workshops and webinars it held for small businesses over the past few months that “30-40% of SMEs have identified reduced cash flow and difficulty in resuming operations because of quarantine and social distancing measures as the biggest challenges.”

The logistics and forwarding firm shares some key takeaways and insights from these workshops on how small businesses can navigate these challenges and bounce back from this unprecedented crisis.

  • If business opportunities have become scarce, pivot the business model

In the face of physical store closures, e-commerce has emerged as the way forward for businesses, as new digital technologies change the playing field and the speed with which companies can and must react.

SMEs should consider a business model that works best for them, whether a purely online model or maintaining a hybrid omni-channel model. Whichever form this takes, supply chains and distribution channels will need to be reconfigured to support that shift.

  • Go digital

Over the last few months, the SMEs that were able to continue operating with fewer disruptions have been those with a “digital-first” approach, establishing their sales channels through different platforms, including their own websites, Facebook, Instagram, and market sellers like Lazada or Shopee.

Among the businesses UPS Philippines surveyed, 75% of SMEs were either in the process of transforming their business to go digital or intended to go digital but didn’t know yet where to start.

This should serve as a strong signal to business owners who have not yet embraced digitalization to consider transforming their businesses to be more future proof.

They also need to consider enhancing the ease of cashless payment options for customers, either through existing platforms such as PayPal or bank transfers over cash-on-delivery options. All these form part of business transformation, which means looking ahead for growth, identifying opportunities presented by new technologies, and spotting new ways of doing things, whether digital payments or ways to bring products to market.

  • Collect data, get insights, learn, improve

Data insights can help SMEs make decisions that would enable their businesses to grow. Data can provide answers to questions such as, “Am I reaching enough potential buyers through my current channels?” or “Is my website or social media content attractive enough for customers to click through and engage more?” or “Am I making it easy for my customers to purchase my products?”

Data can also be utilized to identify potential export markets. One simple example is using web-based analytics to identify where visitors of a website are located, indicating potential demand for Philippine-made products.

  • Know that digital tools can be used in the entire logistics process

One harsh reality that businesses must face is the increasingly competitive and crowded e-commerce market, and the corresponding need to stand out with the right tools. Customer experience is the name of the game in e-commerce, and when SMEs get it right, they will be able to grow the business and build loyalty.

SMEs are advised to arm themselves with tools that enable greater automation, visibility, and flexibility such as Marketplace Shipping, where shipping tasks can be automated from e-commerce platforms like Amazon, Shopify, and Etsy. For SMEs, this means less time and labor spent on picking and packing, as well as manually processing shipments, waybills, and printing labels.

Visibility tools are equally important for SMEs. There are various visibility tools that enable customers to receive push notifications regarding their shipments, thereby eliminating the need to constantly check for updates on the website and having a better buying experience overall.

  • Understand all the costs for customers in the online buying experience, especially for international shipping

While e-commerce offers SMEs the opportunity to expand their customer base beyond domestic audiences, some may find the meshwork of regulations, duties and taxes in international shipping to be complex or unpredictable at times. However, with the right information and access to support from the experts, they can easily export or import products, UPS said.

This begins by computing the total landed cost, or the total charge associated with getting a shipment to its destination. These include the cost of shipping, the applicable duties, taxes, and fees, as well as other factors such as insurance, currency conversion, storage, regulatory fees, fraud prevention, handling fees, payment processing, and other applicable duties.

It’s OK to not be OK.

The combination of movement restrictions, lockdowns and suspension of air travel has created a perfect storm of factors that have challenged even the most resilient businesses over the past few months. But what is important is not who emerges unscathed, but how businesses can learn from this episode’s long-term implications on their path to recovery.

Even as prospects looked dim, many businesses have found elusive bright spots to expand across border. SMEs can grow and rebound from the pandemic through harnessing a wide range of solutions and resources to enable them to reach their targets, even in a business landscape that has changed immeasurably in the space of just under a year.

Photo by Mohammad Shahhosseini

LEAVE A REPLY